“TV Everywhere”: pay your cable bill, watch Entourage online

Time Warner's CEO has a new plan called "TV Everywhere" that will let pay-TV …

2009 is shaping up to be the best of times and the worst of times for TV—and, despite the low probability of doppelgangers and guillotines in the story or TV's transition to the Internet, it still promises to be a fascinating one to watch.

Time Warner CEO Jeff Bewkes certainly did his best this week to keep TV interesting by pitching a new idea called "TV Everywhere" that will let pay-TV subscribers access cable network content online through sites like Hulu. But will it work? Can it work?

TV: It's a fulltime job

Nielsen has just reported that video viewership continues to surge. Americans are watching more video than ever on computers and cell phones, but they're also setting viewership records when it comes to TV. The average American now watches an astonishing 151 hours of television per month—making it nearly a full-time job.

That's great news for TV networks in some ways, but there are two problems. We're in the middle of a recession that has taken a toll on advertising revenues, for one thing; for another, far more networks are competing for viewers' attention now. Shows likes Battlestar Galactica and Mad Men aren't aired on the major networks anymore, but on smaller niche channels.

That has lead to a bad situation for the major networks, one detailed in a New York Times story last week. But at least the major networks have been experimenting with online distribution of even their biggest shows, essentially offering them on-demand to anyone in the country.

Cable networks (mostly) haven't tried such experiments themselves; with the networks so tied to their distribution partners, the cable operators, signing a deal with Hulu or or hosting the shows on a network website looks like bad business. The networks don't want to create a new distribution relationship that will alienate their most important partners.

But Time Warner now has a plan that will allow networks to put material online—and for cable and satellite operators to benefit, as well.

TV Everywhere

The plan is called "TV Everywhere," and it was rolled out yesterday at a conference by Time Warner CEO Jeff Bewkes. The idea is a simple one, but it has huge implications: those who pay for a cable or satellite or IPTV subscription should also get access to the same content online.

Essentially, the plan would turn subscription TV fees into subscription video fees. You pay once and you can access the complete range of content—from HBO to TNT to Sci-Fi Channel—on any device, through any delivery mechanism.

There's some talk of using an existing backend infrastructure such as Hulu to power such a project, but deployment will depend on full buy-in from both the networks that would offer the content and the cable and satellite operators that would offer the service as a bonus to customers. Viewers who want to access cable content would have to login with credentials that would be verified to ensure that they actually subscribe to a pay-TV service. DirecTV has already signaled its willingness to participate.

It's not the same model as recent music industry experiments in paying a monthly subscription fee for access to all music, but the ideas have quite a bit in common. At their core, each envisions consumers developing independence from one particular distribution channel and paying a monthly fee instead for access to content that works on different devices. And not just current content, but huge back catalogs of music or television.

In the case of TV, the TV Everywhere scheme could also put pressure on DVR makers and devices like the Slingbox by providing a simple, always-available archive of cable content that lives in the cloud and comes on demand. Bewkes' idea is that the service would be offered as an incentive to keep consumers from dropping pay-TV altogether; it wouldn't necessarily come with any additional fee.

It's great to see this kind of experimentation, whatever actually comes of the plan, but it seems just as likely that TV networks will eventually jump into whole-hog Internet distribution and streaming. Paired with a cheap HDMI-outputting box (something like the current $99 Roku, for example) on top of the TV, it could well be that TV networks simply strike their own deals for Internet distribution and archiving and people abandon the pay-TV providers altogether (or, more accurately, they abandon the pay-TV providers for TV; Comcast and Verizon will still be essential as providers of broadband services that might be carrying the very content they once profited so handsomely from.)

The people who operate the pay-TV pipes don't want this to happen, of course, but neither do the cable TV networks. NBC boss Jeff Zucker has famously complained about trading "analog dollars for digital pennies," and the current state of the online ad market suggests there's not as much cash to be had from a pure online play as there is from sticking with the older model, in which large percentages of revenue come from cable and satellite operators.

But with the major networks so aggressively putting premium content online at sites like Hulu and TV.com—free to access, quick to stream, with light advertising—the cable networks might also feel pressure to follow suit. That holds doubly true if people truly do start dropping pay-TV in the current recession in favor of DVDs, Netflix, broadcast TV, or ad-supported Internet video.

We're already seeing some cable networks like Comedy Central put key assets like The Daily Show online (both at its own website and on Hulu), and each network that follows this model makes it that much easier for consumers to simply cut out the pay-TV bill.

I have already dumped cable and gone with netflix and hulu. The only thing I ever got to watch were re-runs anyway. I can get those from netflix without commercials. Why should I watch them on cable? When cable start offering options to pay for just the stations I would watch, maybe they will get my business back. Otherwise, I am content, and I still always have more to watch than I have time to watch it.

I feel like in general, this is a step in the right direction that's doomed to fail. People are increasingly conditioned to a la carte programming and many won't want to pay for a whole cable package worth of content. Also, people are, and have always been, used to a lot of free content in the form of hulu. It just seems like, in the same way as DRM and music, that policing this system would cost way too much both in terms of the reputation of the company and in money. I have a feeling that rather than this particular form of online content, we're a lot more likely to see highly targeted advertising as a way of generating revenue in the future.

The difference between TV and the Internet, after all, is that information can be gathered about viewers on the internet. When I watch a show on Hulu today, it baffles me that I end up watching the same advertisement for a Mini Cooper over and over and over again. I watch Fringe but I don't want a freaking Mini Cooper. Just like with Television, though, it has been determined that a sufficient number of the total viewership is likely to want a Mini Cooper. Therefore whether they fit into that demographic or not will be bombarded with commercials for Mini Coopers. Simply put, the ads are not targeted in a way that take advantage of the internet.

By using personal information on the internet accuracy of advertisement will go up and only the people who are likely to want Mini Coopers will see ads for them. As accuracy goes up, the value of each viewing goes up and so prices for advertising spaces go up. Even if, for example, Hulu required you to fill out a profile and then had you log in, it would have significantly more information on you than the average television broadcaster.

Yeah, it's totally sinister... but look at what people are perfectly willing to divulge on facebook with no return at all.

At this point I don't have cable or satellite. All my TV viewing is done either through streamed sites like Hulu or Netflix or downloaded from any one of a dozen torrent sites. At this point I don't see any way that the content providers are going to get me back to paying for TV. It's just not worth the money to me. I'd rather spend the money to get greater internet bandwidth (Yay for fiber optics).

Right now the quality compared to 1080i cable is pretty awful (Hulu) even on the fastest computer. But I do use it and even hooked up a computer to my TV. I still try to DVR shows because of the quality issue but its not hard to see on demand web based content eventually taking over..

My Comcast bill is just obnoxious now. Went up 40 bucks last month. If that's a monopoly, I don't know what is. I can't get FIOS and other choice is some bundle of DSL and direct tv. It really should be illegal. I only wanted basic cable, HBO, dvr, and internet but they force you into these packages to get what were always basic channels. Heaven forbid you should have 2 tv's because your bill will go up another 10 bucks. These people should be in jail. I pray to God every night they die of cancer. 15 bucks a monbe for DVR. You used to be able to buy a vcr that did that for 80 bucks but that's not exactly going to work with your setup anymore. They make sure the digital doesn't work unencrypted. Your stuck renting their vcr for 15 a month. Great deal huh? Why is digital extra when that is the government mandated standard? Why does a basic box cost 10 bucks to rent? My computer could do it for free if their monopoly was declared illegal but the current court is just too pro fascism

Beyond the occasional recorded episode, I hardly ever use my cable. I watch way more Hulu than cable. Miss an episode? Hulu. Not on Hulu? Torrent. I suppose that the new service might replace torrenting, but only if it is as convenient as Hulu. All told I only watch maybe 2-3 hours of TV a week, so I already consider my cable bill disproportionate.

From the article, it seems like I am in an extreme minority. I can't waste days watching tv. Frankly there is very little on tv I want to watch. PBS, Discovery, History, and Science are the only stations that produce content that often catches my interest.

Cable and telecom companies have been worried about this since the mid-90s. Their greatest fear was becoming a commodity bit pipeline while someone else reaps the premium profit from the content that people were willing to pay for. That was the reason for telecom's disastrous foray into the movie business and why at least one cable company laid plans for preventing video streaming over those new fangled cable modems they were experimenting with back in '95. Still haven't figured out a model that lets them control the business.

Now it almost sounds like they've thrown in the towel. For all intents and purposes, this proposal puts Time Warner into competition with Netflix and Amazon sets the stage for the end of cable as we know it. They see the handwriting on the wall.

As for the folks still lobbying for cable companies to introduce a la carte channel pricing, I think that train has left the station. Why pay for whole channels when you can pay for just the specific shows you want to watch, especially when you can control when you watch them?

PW, you hit the nail on the head. Which is why I cannot figure out how that is possibly legal. How can the cable companies place a braodband cap when it is in effect limiting their competition. That just reeks of illegal use of monopoly (local monopoly of a resource).

Also, I have not paid for cable or satellite for close to four years now, and I was surprised at how easy it was. This was back before Hulu and the networks were just beginning to put some shows online, but we did the math and we could buy the complete seasons on DVD of the shows that we liked and still come out money ahead over paying for all of the crap that we never watched.

Since then Hulu has came out and the networks are putting more and more shows online for free (with ads of course).

Is the quality as good for the streamed shows? No, but they are getting up there. Also, if one is all about quality then you shouldn't be watching network TV over cable or satellite since the over-the-air broadcast are not as compressed and thus have better quality. Tested this out at my parents, who have DirectTV, and there is a slight but noticeable difference when watching two TVs side by side.

Anyways, the future is coming and unless the government lets the cable companies illegally restrict the internet pipeline there is no stopping it now.

PW, you hit the nail on the head. Which is why I cannot figure out how that is possibly legal. How can the cable companies place a braodband cap when it is in effect limiting their competition.

Well as pointed out when the subject of caps comes up. One can exceed one's limit with all kinds of content, not just video. If the GNU foundation had caps, then they could exceed it downloading free software all day. So the question should be, "Are the caps being applied only to video"?

Overall, I applaud the industry for extracting their heads from their rears and embracing new technology here. Apparently their TV divisions have learned something from the disaster of their music divisions.

Nonetheless I agree that there is a collision coming between broadband caps and the trend to move entertainment online. I think the day is coming where we all pay for our bandwidth per GB and I heartily approve although I don't see how ad-supported sites will be able to continue to function when the viewers are paying bandwidth fees for an ad they don't want to see.

No doubt the ISPs will attempt to offer unmetered streams to deliver their premium video content in tandem with the bandwidth you pay for. It's one way to deal with the mess and it'll make the ISPs happy, but honestly I think the *consumer* would be happier in the long run with micropayments -- as bandwidth fees -- for that episode of Iron Chef they can't live without than a complex bill full of layered fees and walled gardens of content.

Now it almost sounds like they've thrown in the towel. For all intents and purposes, this proposal puts Time Warner into competition with Netflix and Amazon sets the stage for the end of cable as we know it. They see the handwriting on the wall.

Time Warner can't compete with NetFlix. They lose on Price. I pay $9.16 a month for Netflix and TW can't and won't ever touch that price point.

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Nonetheless I agree that there is a collision coming between broadband caps and the trend to move entertainment online. I think the day is coming where we all pay for our bandwidth per GB and I heartily approve although I don't see how ad-supported sites will be able to continue to function when the viewers are paying bandwidth fees for an ad they don't want to see.

We wouldn't have caps now if the govenrment would force the tear down of cable companies monopolies. This monopoly is the only reason they could and do have transfer caps. Give me a choice of three of four real broadband ( minimum of DOCSIS3) companies and I gaurantee transfer caps will be OVER!

Has this been run past the lawyers yet? Or is this like the network DVR thing a few years back? In 2-3 weeks are we going to be hearing about how this is impossible because TWC hasn't paid for a network license to send this stuff on demand and is stealing from the poor pockets of *.hollywood?

Its funny....I actually did this last month. I have netflix and I use hulu quite a bit. Its remarkable how I don't miss TV...and yet its not. We have been driven by habit and conditioning imo - MUST HAVE TV. bleh

Best thing I ever did. The only thing my tv gets used for is dvds and thats only about half the time.

@typhus: I'd love to make this switch; unfortunately I'm too addicted to sports to do it If anyone knows how to get live, real-time NFL and NHL coverage (I can easily live w/o the others; the Redskins and Sabres are a requirement, like breathing), please, please,please let me know. I want out of DirecTV like there is no tomorrow (Great service; gouging prices).

[quote} Ostracus - And les (sic) one forget TWC is also an ISP. [/quote]

Doesn't that rather assume that you are buying IP services from them in addition to the cable? And so what good does all this do the user when the ISPs are going to cap your service so that you won't be able to watch much of anything without going over your limit and either being (1) cut off, (2) slowed down so that nothing is viewable, (3) billed at a premium rate; or similarly screwed.

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mknopp - PW, you hit the nail on the head. Which is why I cannot figure out how that is possibly legal. How can the cable companies place a braodband cap when it is in effect limiting their competition.

Wait for it....no, seriously, just wait for it....i can smell "lawsuit" in the air.

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AppleInformatics

@typhus: I'd love to make this switch; unfortunately I'm too addicted to sports to do it.

Just don't get to like soccer or you will have to pick up a premium package.

I'd love to make this switch; unfortunately I'm too addicted to sports to do it

Yeah. The sports industry is even more anti-innovation than the cable industry. It's rare to find a reasonably-priced pay-per-view or subscription option for viewing sports over the Internet. And when you do, there are usually contractual blackout restrictions on who can watch. ESPN 360 is a nice exception: if available (based on contracts with ISPs), you can get on-demand college football/basketball and occasional NBA games for free.

For casual sports viewers, this isn't the end of the world because most major sports events are available over-the-air for free, as is an occasional local MLB or NBA game. (And, as someone mentioned, you'll even get a better-quality video encoding over-the-air than you will through cable.)

The people who operate the pay-TV pipes don't want this to happen, of course, but neither do the cable TV networks. NBC boss Jeff Zucker has famously complained about trading "analog dollars for digital pennies," and the current state of the online ad market suggests there's not as much cash to be had from a pure online play as there is from sticking with the older model, in which large percentages of revenue come from cable and satellite operators.

There's also lower overhead. The question isn't revenue, it's profit.

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Originally posted by Daniel Smith:For casual sports viewers, this isn't the end of the world because most major sports events are available over-the-air for free, as is an occasional local MLB or NBA game.

Aye. Until the NFL and NBA embrace the MLB.com model, I'm seriously considering locating a nearby sports bar, since I'm planning to drop to the lowest cable tier. If it doesn't come with TNT, ESPN, ESPN2 and FSC, well, fuck it. I'm done paying the premium.

Ostracus:Well as pointed out when the subject of caps comes up. One can exceed one's limit with all kinds of content, not just video. If the GNU foundation had caps, then they could exceed it downloading free software all day. So the question should be, "Are the caps being applied only to video"?

So, this is just another example of them wanting to apply a double standard. People use bittorent for legal purposes, but they are all gung-ho about blocking it because the "majority" of its usage is illegal.

So, the majority of the caps is to limit the amount of video people can watch over the internet. However, it is theoretically possible that a person could download an entire Linxu distors, the entire OpenOffice package, and a few other free software packages each day for a month and also hit the limit.

Don't be ridiculous. These caps are all about video. Yes, there is some theoretical person out there that might just hit that limit downloading something other than video, but that is unlikely and not the reason they are doing this.

Ostensibly, this was done to combat P2P sharing. And while there is some truth to this fact. It also serves an awfully convenient excuse for them to make sure people cannot legally obtain any competitive products over the internet which might cut into their cable profits.

Time Warner can't compete with NetFlix. They lose on Price. I pay $9.16 a month for Netflix and TW can't and won't ever touch that price point.

Well as one of the helpful posters pointed out. TWC is a media company as well so while they can't compete with other companies content delivered via other means. They can for their content however it's delivered.